Chinese facial recognition startup is said to raise $460M

(Bloomberg) -- Megvii Inc., a Chinese developer of facial-recognition technology, has raised about $460 million from investors including billionaire Jack Ma’s Ant Financial and one of China’s largest state-backed venture funds, according to a person familiar with the matter.

The Beijing-based company, also known as Face++, has attracted several other investors including the Russia-China Investment Fund, a venture backed by sovereign wealth funds of the two nations, and SK Group, the person said, requesting not to be named because the matter is private. The funding will give the startup a valuation of at least $1 billion and may be announced as soon as Tuesday, the person said.

Megvii provides face-scanning systems to companies including Lenovo Group Ltd. and Ant Financial, the payments company controlled by Ma. Facial recognition technology has attracted keen interest from government authorities in China who want to be able to detect crimes and threats to social stability before they take place.

The state venture fund, which led Megvii’s latest round, was set up in August last year and has 200 billion yuan ($30 billion) asset under management. The fund is under the supervision of China’s State-owned Assets Supervision and Administration Commission, according to the official Xinhua News Agency.

Fanny Wu, a spokeswoman for Ant Financial, said she couldn’t immediately provide a comment. Megvii declined to comment in an email.

Megvii’s software uses facial scans held in a Ministry of Public Security database drawn from legal identification files on about 1.3 billion Chinese.

Existing investor Foxconn Technology Group also took part in the current fundraising, the person said. Its other earlier investors include CCB International Holdings Ltd., Qiming Venture Partners and Sinovation Ventures.